LC & Term Loans

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 May 2011 A.I just want to know what is a Letter of Credit. How will be conducted audit for it and what documents are required for audit.

B. What is a term loans,How will be conducted audit for it and what documents are required for audit.

CS Bijoy

CS Bijoy (Expert)
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30 May 2011 Letter of Credit is safe mode of payment or promise to pay in trading.
In audit there is requirement of Invoice or contract related document in respect which payment is made.
Term Loan is a loan from bank for a specific amount that has a specified repayment schedule and a floating interest rate. Term loans almost always mature between one and 10 years.